X0202 4 2007-05-21 0 0001331301 SMART BALANCE, INC. SMBL 0001218321 OSS CAPITAL MANAGEMENT 598 MADISON AVE NEW YORK NY 10022 0 0 1 0 Common Stock ($.0001 par value) 2007-05-21 4 P 0 70000 9.32 A 1945000 I See Footnotes Common Stock ($.0001 par value) 2007-08-06 4 P 0 100000 8.80 A 2045000 I See Footnotes This Form 4 is being filed to report that O.S.S. Capital Management LP, a Delaware limited partnership (the "Investment Manager"), Schafer Brothers LLC, a Delaware limited liability company (the "SB LLC") and Mr. Oscar S. Schafer ("Mr. Schafer", collectively with the Investment Manager and SB LLC, the "Reporting Persons") purchased an additional 70,000 shares of Smart Balance, Inc. (the "Issuer") on May 21, 2007. The Reporting Persons then purchased an additional 100,000 shares of the Issuer on August 6, 2007. The Reporting Persons have investment discretion with respect to shares of common stock and warrants held by a Cayman Islands exempted company and two Delaware limited partnerships as more fully described in the Form 3 filed on December 28, 2005 (Accession Number: 0000902664-05-002439). Each of the Investment Manager, SB LLC and Mr. Schafer may be deemed to beneficially own 2,045,000 shares of common stock, which represent, together, approximately 12.8% of the outstanding shares of common stock and 1,875,000 warrants. Each of the Investment Manager, SB LLC, and Mr. Schafer disclaims beneficial ownership of the securities included in this report and this report shall not be deemed an admission that either the Investment Manager, SB LLC, or Mr. Schafer is the beneficial owner of such securities for purposes of Section 16 or for any other purpose. This report shall not be deemed an admission that the Reporting Persons are or have been the beneficial owners of such securities for purposes of Section 16 or for any other purpose. /s/ Oscar S. Schafer 2007-08-08